Spite Is Not a Business Strategy

-1Count me among the skeptics who see Google’s Chrome OS announcement this week as, first and foremost, an effort to induce pain in its longtime rival Microsoft. And a pointless one at that.

Many people writing about Chrome OS have argued that there’s a sound business strategy behind it, that of leading to more Google ads for us to click on. While I agree in principle, I also think it’s easy to overstate the benefit to Google: Isn’t most of its revenue already coming from surfers using Windows-based PCs? And yes, many PCs take minutes to boot up and hours to configure – as Google cattily pointed out in arguing how computers (read: Windows) “need to get better” — but will we really use the time saved to click on sponsored links? I doubt it.

Microsoft’s operating software isn’t stealing ad revenue from Google, but if Chrome OS is broadly adopted — a big if for now — it would devastate Microsoft’s profits. Putting such a stake in Microsoft’s cold heart has been a dream inspiring Google’s founders since the company’s earliest days, long before it made much strategic sense.

There’s a similar logic here to Google’s attempt to forge a revenue-sharing partnership with Yahoo, which would have incrementally improved Google’s own revenue had antitrust concerns not derailed it. Google didn’t really need that deal. Rather it was looking to deprive Microsoft of a search asset it very badly wanted, because it believes that if Microsoft loses, it wins. Even if winning is just schadenfreude.

Google’s desire to beat Microsoft goes well beyond its other rivalries. Yahoo has long posed a more direct threat to Google’s ad revenue, but the competitive spirit was always a productive one, and the goal seemed to be a better experience for the web user. Twitter’s real-time search looms as a new threat, but Google has nothing but respect for the company. But Microsoft? The overriding goal is to cause pain.

And that may explain why Google is announcing an operating software that won’t actually be used by many consumers until well over a year from now. Forget that the web and open-source software will all have all evolved significantly by the fall of 2010; the news of Chrome OS has dominated the tech news cycle just as buzz for Windows 7 was building. Google did something similar when Microsoft unveiled Bing, stealing the PR thunder with its own announcement of Google Wave.

Silicon Valley companies have long fostered an animosity toward Microsoft because of its long history of bullying and squashing innovative startups. But that’s ancient history now, as antitrust probes have weakened Microsoft and the cloud has made its core products more peripheral. Beating up on Microsoft used to be a matter of survival in Silicon Valley. Now it’s just an exercise in spite.

loading

Comments have been disabled for this post